Correlation Between Hillenbrand and Schneider Electric
Can any of the company-specific risk be diversified away by investing in both Hillenbrand and Schneider Electric at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Hillenbrand and Schneider Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hillenbrand and Schneider Electric SA, you can compare the effects of market volatilities on Hillenbrand and Schneider Electric and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Hillenbrand with a short position of Schneider Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hillenbrand and Schneider Electric.
Diversification Opportunities for Hillenbrand and Schneider Electric
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hillenbrand and Schneider is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Hillenbrand and Schneider Electric SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schneider Electric and Hillenbrand is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Hillenbrand are associated (or correlated) with Schneider Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Schneider Electric has no effect on the direction of Hillenbrand i.e., Hillenbrand and Schneider Electric go up and down completely randomly.
Pair Corralation between Hillenbrand and Schneider Electric
Allowing for the 90-day total investment horizon Hillenbrand is expected to generate 2.46 times more return on investment than Schneider Electric. However, Hillenbrand is 2.46 times more volatile than Schneider Electric SA. It trades about 0.27 of its potential returns per unit of risk. Schneider Electric SA is currently generating about -0.15 per unit of risk. If you would invest 2,820 in Hillenbrand on August 27, 2024 and sell it today you would earn a total of 634.00 from holding Hillenbrand or generate 22.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hillenbrand vs. Schneider Electric SA
Performance |
| Timeline |
| Hillenbrand |
| Schneider Electric |
Hillenbrand and Schneider Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hillenbrand and Schneider Electric
The main advantage of trading using opposite Hillenbrand and Schneider Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hillenbrand position performs unexpectedly, Schneider Electric can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Schneider Electric will offset losses from the drop in Schneider Electric's long position.| Hillenbrand vs. Aquagold International | Hillenbrand vs. Morningstar Unconstrained Allocation | Hillenbrand vs. High Yield Municipal Fund | Hillenbrand vs. Thrivent High Yield |
| Schneider Electric vs. Sandvik AB ADR | Schneider Electric vs. Ingersoll Rand | Schneider Electric vs. Fanuc | Schneider Electric vs. Nordex SE |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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